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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Paul Senior who wrote (4371)	7/2/1998 3:32:00 PM
From: MarkM	Read Replies (1) \| Respond to of 78744

I have a question "el basico neophyto grande". I am learning the ABC's of valuation. I understand that a GPE ratio (Growth to P/E ratio) of higher than 1 is good, since growth is greater than the P/E. Reading the Motley Fool I see they have a Fool ratio which is actually the inverse of a GPE, (it is the P/E ratio divided by the annualized growth). Can anyone explain to me why people consider a company to be fairly valued when the growth is the same as the P/E? Like, why not 5 times P/E? Why not 1.9862837564 times P/E? Why not the square root of PI times Bill Clinton? I can see that the more annualized growth then you should expect a higher P/E, since the company is worth more. But why say that the P/E should be equal to the growth? Any SIMPLE explanations? Thanks in advance!

To: Paul Senior who wrote (4371)	7/4/1998 11:56:00 PM
From: Scott Mc	Respond to of 78744

Paul, re housing/home building... BZH:Yes brought BZH to the thread some time ago, still looks cheap, however I own the convertible and shorted some stock(20%)against it last week. They have said they will call the convert in Sept so will probably be reducing/eliminating my position this fall. EAGL:Also mentioned Eagle hardware(EAGL) which had a good move last couple of weeks from ARO $17 to $24, this is another one where I own the convert and have shorted against it(30%). Based on the still low valuation of EAGL, I could be out of it as well if the debenture gets called(needs to trade above $27 for 30 days,closed at 24). HBI:I mentioned HBI(Homebase) a few times, traded it a couple months back but looks real real cheap,I may buy it again as any positives should really move it. Scott